UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 19, 2010 UAL CORPORATION UNITED AIR LINES, INC. (Exact name of registrant as specified in its charter) Delaware 001-06033 36-2675207 Delaware 001-11355 36-2675206 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification Number) 77 W. Wacker Drive, Chicago, IL 60601 (Address of principal executive offices) (Zip Code) (312) 997-8000 Registrant’s telephone number, including area code (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): April 19,
2010
UAL CORPORATION UNITED AIR LINES, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-06033 36-2675207 Delaware 001-11355 36-2675206
(State or other jurisdiction of incorporation)
(Commission File Number)
(312) 997-8000 Registrant’s telephone number, including area
code
(Former name or former address, if changed since last
report.)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed in its Current Report on Form 8-K filed on
January 15, 2010, United Air Lines, Inc. (“United”) completed two
private offerings on January 15, 2010 (the “Offerings”) consisting
of $500,000,000 aggregate principal amount of 9.875% Senior Secured
Notes due 2013 (the “Senior Secured Notes”) and $200,000,000
aggregate principal amount of 12.000% Senior Second Lien Notes due
2013 (the “Second Lien Notes” and, together with the Senior Secured
Notes, the “Notes”). The Notes were sold only to qualified
institutional buyers in accordance with Rule 144A under the
Securities Act of 1933, as amended (the “Securities Act”), and to
non-U.S. persons in accordance with Regulation S under the
Securities Act. The proceeds from the Offerings were deposited into
an escrow account pending the satisfaction of certain conditions
(the “Escrow Conditions”), including the perfection of United’s
interest in the collateral securing its obligation under the Notes
in favor of the collateral trustee.
On April 19, 2010, United satisfied the Escrow Conditions and the
proceeds from the Offerings were released from escrow. In addition,
United entered into the Priority Lien Security Agreement, dated as
of April 19, 2010 (the “Priority Lien Security Agreement”), between
United and Wilmington Trust FSB, as collateral trustee (the
“Collateral Trustee”), and the Junior Lien Security Agreement,
dated as of April 19, 2010 (the “Junior Lien Security Agreement”
and, together with the Priority Lien Security Agreement, the
“Security Agreements”), between United and the Collateral Trustee,
perfecting its interest in the collateral securing United’s
obligations under the Notes in favor of the Collateral
Trustee.
The foregoing descriptions of the Security Agreements are qualified
in their entirety by reference to those agreements. Item 9.01.
Financial Statements and Exhibits. Exhibit No. Description
4.1*
Priority Lien Security Agreement, dated as of April 19, 2010,
between United Air Lines, Inc. and Wilmington Trust FSB, as
collateral trustee
4.2*
Junior Lien Security Agreement, dated as of April 19, 2010, between
United Air Lines, Inc. and Wilmington Trust FSB, as collateral
trustee
* Filed herewith electronically
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
UAL CORPORATION UNITED AIRLINES, INC.
By: /s/ Kathryn A. Mikells Name: Kathryn A. Mikells Title:
Executive Vice President and
Chief Financial Officer
4.1*
Priority Lien Security Agreement, dated as of April 19, 2010,
between United Air Lines, Inc. and Wilmington Trust FSB, as
collateral trustee
4.2*
Junior Lien Security Agreement, dated as of April 19, 2010, between
United Air Lines, Inc. and Wilmington Trust FSB, as collateral
trustee
* Filed herewith electronically
Table of Contents
Section 4. Representations, Warranties and Covenants 3
Section 5. Supplements, Further Assurances 5
Section 6. Provisions Concerning Pledged Collateral 6
Section 7. Collateral Trustee Appointed Attorney-in-Fact 7
Section 8. Collateral Trustee May Perform 7
Section 9. The Collateral Trustee 7
Section 10. Events of Default, Remedies 8
Section 11. Application of Proceeds 10
Section 12. No Waiver; Discontinuance of Proceeding 10
Section 13. [Reserved] 11
Section 16. Definitions 12
Section 17. Notices 15
Section 19. Governing Law 16
Section 20. Consent to Jurisdiction and Service of Process 16
Section 21. Security Interest Absolute 16
Section 22. Severability of Provisions 17
i
Section 26. Limited Obligations 17
Section 27. Construction of Schedule I 18
Section 28. Rules of Interpretation 18
EXHIBIT A – Form of Japan Slot Transfer Form
Schedule I – Japan Routes
PRIORITY LIEN SECURITY AGREEMENT
PRIORITY LIEN SECURITY AGREEMENT, dated as of April 19, 2010 (as
amended, modified or supplemented from time to time, the
“Agreement”), between UNITED AIR LINES, INC., a Delaware
corporation (“United”) (together with its permitted successors and
assigns, the “Pledgor”) and WILMINGTON TRUST FSB, as Collateral
Trustee (together with its successors and permitted assigns, the
“Collateral Trustee”), for the benefit of the Priority Lien Secured
Parties. Except as otherwise defined herein, terms used herein and
defined in the Collateral Trust Agreement shall be used herein as
therein defined.
W I T N E S S E T H:
WHEREAS, the Pledgor and the Collateral Trustee are parties to (i)
that certain Indenture dated as of January 15, 2010 (as amended,
restated, supplemented or otherwise modified from time to time, the
“Indenture”), by and among United, the Guarantors party thereto,
the Collateral Trustee, and The Bank of New York Mellon Trust
Company, N.A., as trustee (together with its successors and
permitted assigns, the “Indenture Trustee”), and (ii) that certain
Collateral Trust Agreement dated as of January 15, 2010 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Collateral Trust Agreement”), by and among United, the
Indenture Trustee and the Collateral Trustee;
WHEREAS, in order to secure the Pledgor’s obligations under the
Indenture and to induce the Escrow Agent to release the proceeds
from the Escrow Account to the Pledgor in accordance with the terms
of the Escrow and Security Agreement, the Pledgor has agreed to
grant a continuing Lien on the Collateral (as defined below) to
secure the Priority Lien Obligations;
WHEREAS, the Pledgor may, from time to time, incur additional
Priority Lien Obligations in accordance with the terms of the
Collateral Trust Agreement and, in order to induce the applicable
Priority Lien Representatives and holders of additional Priority
Lien Obligations to enter into the applicable Priority Lien
Documents and to make the applicable Priority Lien Debt available
to the Pledgor as provided therein, the Pledgor agrees to grant to
the Collateral Trustee a continuing Lien on the Collateral (as
defined below) to secure such additional Priority Lien Obligations;
and
WHEREAS, the Pledgor desires to execute this Agreement to satisfy
the condition described in the preceding paragraphs;
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor hereby makes the following
representations and warranties to the Collateral Trustee and hereby
covenants and agrees with the Collateral Trustee as follows:
Section 1. Pledge. The Pledgor hereby pledges to the Collateral
Trustee and grants to the Collateral Trustee for the benefit of the
Priority Lien Secured Parties a security interest in all of the
following (the “Collateral”), to secure all of the Priority Lien
Obligations:
(i) all of the right, title and interest of the Pledgor in, to and
under the Japan Routes, the Japan Slots, and the Japan Gate
Leaseholds from time to time; and
(ii) all of the right, title and interest of the Pledgor in, to and
under all Proceeds of any and all of the foregoing (including,
without limitation, all Proceeds (of any kind) received or to be
received by the Pledgor upon the transfer or other such disposition
of such Collateral notwithstanding whether the pledge and grant of
the security interest in such Collateral is legally effective under
applicable law);
provided, however, that notwithstanding any other provision of this
Agreement, this Agreement shall not constitute a grant of a
security interest in any Japan Gate Leaseholds (and no such
property shall be “Collateral” for purposes of this Agreement) to
the extent that such grant of a security interest is prohibited by
any applicable law or a Governmental Authority or Airport
Authority, requires a consent not obtained of any Governmental
Authority or Airport Authority, or is prohibited by, or constitutes
a breach or default under or results in the termination of or
requires any consent not obtained under, any contract, license,
agreement, instrument or other document evidencing or giving rise
to the Pledgor’s interest in such Japan Gate Leaseholds, except to
the extent that such applicable law, requirement or prohibition by
any Governmental Authority or Airport Authority, or the term in
such contract, license, agreement, instrument or other document or
shareholder or similar agreement providing for such prohibition,
breach, default or termination or requiring such consent is
ineffective under applicable law, including without limitation, the
UCC; and provided further, that notwithstanding any other provision
of this Agreement, this Agreement shall not constitute a grant of a
security interest in any Japan Route Foreign Slots to the extent
the grant of such security interest is prohibited by applicable
foreign law.
Section 2. Obligations. This Agreement secures, and the Collateral
is collateral security for, the Priority Lien Obligations.
Section 3. No Release. Nothing set forth in this Agreement shall
relieve the Pledgor from the performance of any term, covenant,
condition or agreement on the Pledgor’s part to be performed or
observed under or in respect of any of the Collateral or from any
liability to any Person under or in respect of any of the
Collateral or impose any obligation on the Collateral Trustee or
any Priority Lien Secured Party to perform or observe any such
term, covenant, condition or agreement on the Pledgor’s part to be
so performed or observed or impose any liability on the Collateral
Trustee or any Priority Lien Secured Party for any act or omission
on the part of the Pledgor relating thereto or for any breach of
any representation or warranty on the part of the Pledgor contained
in this Agreement, or in respect of the Collateral or made in
connection herewith or therewith. This Section 3 shall survive the
termination of this Agreement and the discharge of the Pledgor’s
other obligations hereunder and under the Priority Lien
Documents.
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Section 4. Representations, Warranties and Covenants. The Pledgor
represents, warrants and covenants as follows:
(i) All filings, registrations and recordings necessary or
reasonably requested by the Collateral Trustee or any Priority Lien
Representative to create, preserve, protect and perfect the
security interests granted by the Pledgor to the Collateral Trustee
for the benefit of the Priority Lien Secured Parties in respect of
the Collateral have been accomplished by the Pledgor to the extent
that such security interests can be perfected under the UCC and
Title 49. The security interests granted to the Collateral Trustee
for the benefit of the Priority Lien Secured Parties pursuant to
this Agreement in and to the Collateral constitute and hereafter at
all times shall constitute a perfected security interest therein
superior and prior to the rights of all other Persons therein,
subject, in the case of priority only, only to Permitted Liens, to
the extent such perfection and priority can be obtained under the
UCC or by filing a record of such security interest with the FAA,
and the Collateral Trustee is entitled to all the rights,
priorities and benefits afforded by the UCC as enacted in any
relevant jurisdiction and Title 49 to perfected security
interests.
(ii) There are no filings, registrations or recordings necessary to
create, preserve, protect or perfect the security interests granted
by the Pledgor to the Collateral Trustee for the benefit of the
Priority Lien Secured Parties in respect of the Collateral under
Title 49.
(iii) The Pledgor is, and as to Collateral acquired by it from time
to time after the date hereof the Pledgor will be, the holder of
all such Collateral free from any Lien or adverse claims except for
(1) the Lien and security interest created by this Agreement and
(2) Permitted Liens. The Pledgor shall use commercially reasonable
efforts to defend the Collateral against any and all claims and
demands of all Persons at any time claiming any interest therein
adverse to the Collateral Trustee or any Priority Lien Secured
Party (other than Permitted Liens).
(iv) There is no financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) on
the date hereof, covering or purporting to cover any interest of
any kind in the Collateral, and so long as all of the Priority Lien
Documents have not been terminated or any of the Priority Lien
Obligations remain outstanding, the Pledgor shall not execute or
authorize to be filed in any public office any financing statement
(or similar statement or instrument of registration under the law
of any jurisdiction), or statements relating to the Collateral,
except financing statements (or similar statements or instruments
of registration under the law of any jurisdiction) filed or to be
filed in respect of and covering the security interests granted
hereby by the Pledgor and except with respect to Liens permitted by
each applicable Priority Lien Document.
(v) The chief executive offices of the Pledgor as of the date of
this Agreement are located at 77 W. Wacker, Chicago, Illinois
60601. The Pledgor shall not, until it shall have given to the
Collateral Trustee not less than 10 days’ prior written notice of
its
3
intention to do so, (a) move its chief executive office from the
location referred to in the previous sentence or change its
jurisdiction of incorporation, or (b) change its name, identity or
corporate or other organizational structure to such an extent that
any financing statement filed by the Collateral Trustee in
connection with this Agreement would become misleading; and the
Pledgor shall, in each case, provide such other information in
connection therewith as the Collateral Trustee or any Priority Lien
Representative may reasonably request and shall have taken all
action reasonably satisfactory to the Collateral Trustee and the
Priority Lien Representatives to maintain the perfection and
priority of the security interest of the Collateral Trustee on
behalf of the Secured Parties in the Collateral intended to be
granted hereby.
(vi) Set forth on Schedule I is a true, correct and complete list
of the Japan Routes and Japan Slots at Tokyo’s Narita Airport, in
each case as of the date hereof, including a copy of each
certificate or order issued by the DOT representing such Japan
Routes. The Pledgor represents and warrants that it holds the
requisite authority to operate over the Japan Routes pursuant to
Title 49 and all rules and regulations promulgated thereunder,
subject only to the regulations of the DOT, the FAA and the
applicable Japan Route Foreign Aviation Authority, and that it has,
at all times after obtaining each such Japan Route, complied in all
material respects with all of the terms, conditions and limitations
of each such certificate or order issued by the DOT and the rules
and regulations of the applicable Japan Route Foreign Aviation
Authority and with all applicable provisions of Title 49 and
applicable rules and regulations promulgated thereunder, and that
there exists no material violation of such regulations, terms,
conditions or limitations that gives the FAA, DOT or the applicable
Japan Route Foreign Aviation Authority the right to terminate,
cancel, withdraw or modify the rights of the Pledgor in any such
Japan Routes or Japan Slots. The Pledgor further represents and
warrants that, as of the date hereof, none of the airports located
in the United States of America at which the Pledgor conducts
scheduled operations for direct non-stop flights to Japan using the
Japan Routes is a slot-constrained airport. If any of the airports
located in the United States of America at which the Pledgor
conducts scheduled operations for direct non-stop flights to Japan
using the Japan Routes is or becomes a slot-constrained airport
after the date hereof, the Pledgor shall promptly notify the
Collateral Trustee thereof. If at any time the Pledgor shall hold
or acquire any Japan Route FAA Slot, then the Pledgor shall
promptly deliver to the Collateral Trustee a blank, undated, signed
Japan Route FAA Slot transfer document (substantially in the form
of Exhibit A hereto or such other form reasonably satisfactory to
the Collateral Trustee) with respect to such Japan Route FAA Slot
to the extent such transfer document is applicable.
(vii) The Pledgor is an “air carrier” within the meaning of Section
40102 of Title 49 and holds a certificate under Section 41102 of
Title 49. The Pledgor holds an air carrier operating certificate
issued pursuant to Chapter 447 of Title 49. The Pledgor is a
“citizen of the United States” as defined in Section 40102(a)(15)
of Title 49 and as that statutory provision has been interpreted by
the DOT pursuant to its policies (a “United
4
States Citizen”). The Pledgor possesses all necessary certificates,
franchises, licenses, permits, rights, designations,
authorizations, exemptions, concessions, frequencies and consents
which relate to the operation of the routes flown by it and the
conduct of its business and operations as currently conducted
except where failure to so possess would not, in the aggregate,
have a material adverse effect on the business, operations or
financial condition of United and its subsidiaries, taken as a
whole. As of the date hereof there are no license fees owed on the
Pledgor’s DOT or FAA licenses, certificates or authorizations. The
Pledgor is in compliance with all material requirements of the
certificates and authorizations issued to it by the DOT or the
FAA.
(viii) The Pledgor has full corporate power and authority and legal
right to pledge all of the Collateral pursuant to this
Agreement.
(ix) Except for matters that would not reasonably be expected to
result in a Material Adverse Effect, no consent of any other party
(including, without limitation, stockholders or creditors of the
Pledgor), and no consent, authorization, approval, or other action
by, and (except in connection with the perfection of the Lien
created hereby) no notice to or filing with, any Governmental
Authority or other Person is required either (x) for the pledge by
the Pledgor of the Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement or (y) for the
exercise by the Collateral Trustee of the rights provided for in
this Agreement or the remedies in respect of the Collateral
pursuant to this Agreement; provided, however, that the (A)
transfer of (other than the grant or pledge of a security interest
in) the Japan Routes is subject to the consent of the DOT pursuant
to Section 41307 of Title 49 and is subject to Presidential review
pursuant to Section 41307 of Title 49, (B) any transfer of (other
than the grant or pledge of a security interest in) Japan Route FAA
Slots may be subject to confirmation by the FAA, (C) the transfer
of (other than the grant or pledge of a security interest in) Japan
Gate Leaseholds may be subject to approval by Governmental
Authorities or Airport Authorities, aviation authorities, air
carriers or other lessors and (D) the transfer of (other than the
grant or pledge of a security interest in) Japan Route Foreign
Slots may be subject to approval by the applicable Japan Route
Foreign Aviation Authority or Airport Authorities.
(x) All information set forth herein relating to the Collateral is
accurate in all material respects as of the date hereof.
(xi) This Agreement is made with full recourse to the Pledgor and
pursuant to and upon all the warranties, representations, covenants
and agreements on the part of the Pledgor contained herein.
Section 5. Supplements, Further Assurances. The Pledgor agrees that
at any time and from time to time, at the reasonable expense of the
Pledgor, the Pledgor will promptly execute, acknowledge and deliver
all further security documents, instruments, certificates, notices
and other documents, and take all further action, that may be
reasonably required under, or reasonably requested by the
Collateral Trustee or any Priority Lien Representative with
5
respect to, applicable law or by the DOT, Japan Route Foreign
Aviation Authorities, Governmental Authorities, Airport
Authorities, aviation authorities, air carriers or other lessors or
that may be required or that the Collateral Trustee or any Priority
Lien Representative may reasonably request in order to create,
perfect, protect, assure and enforce any security interest granted
or purported to be granted or intended to be granted hereby or to
enable the Collateral Trustee to exercise and enforce its rights
and remedies hereunder or under the Priority Lien Documents to
which it is a party with respect to any Collateral, including,
without limitation, any actions reasonably requested by the
Collateral Trustee or any Priority Lien Representative to register,
record and identify the Collateral Trustee as a “Holder” of a Japan
Route FAA Slot with the FAA and to cause evidence of its rights to
be duly recorded, filed or filed for recording, to the extent
permitted or required under any applicable law, by the Pledgor as
holder, and any actions reasonably requested by the Collateral
Trustee or any Priority Lien Representative required to perfect,
preserve and protect any such security interest under other
applicable laws.
Section 6. Provisions Concerning Pledged Collateral.
(i) Financing Statements. The Pledgor hereby authorizes the
Collateral Trustee, at any time and from time to time, to file or
record such financing statements which reasonably describe the
Collateral and amendments thereto, in the form provided to it by
the Pledgor, as may from time to time be required or necessary to
grant, continue and maintain a valid, enforceable, first priority
security interest in the Collateral as provided herein (to the
extent such perfection and priority can be obtained by filing a UCC
financing statement), and the other rights, as against third
parties, provided hereby, all in accordance with the UCC as enacted
in any and all relevant jurisdictions or any other relevant law.
The Pledgor shall pay any applicable filing fees and other
reasonable out-of-pocket expenses related to the filing of such
financing statements and amendments thereto. The Collateral Trustee
hereby authorizes the Pledgor to file (i) financing statements and
amendments to financing statements filed on the date hereof in each
case adding Collateral and (ii) continuation statements of any
financing statement naming the Collateral Trustee, as secured
party, and Pledgor, as debtor, in each case filed pursuant to the
terms of this Agreement and the other Priority Lien
Documents.
(ii) Compliance with Laws and Regulations. Except for matters that
would not reasonably be expected to result in a Material Adverse
Effect, the Pledgor shall promptly comply in all respects with all
laws, ordinances, orders, rules, regulations, and requirements of
all federal, state, municipal or other governmental or
quasi-governmental authorities or bodies including, without
limitation, Japan Route Foreign Aviation Authorities, then having
jurisdiction over the Collateral (or any part thereof) and/or the
use thereof by the Pledgor, of every nature and kind (the
“Requirements”) including any of the same which relate to or
require changes or requirements incident to or as the result of any
use thereof or otherwise, and the Pledgor shall so comply, whether
or not such Requirements shall now exist or shall hereafter be
enacted or promulgated and whether or not the same may be said to
be within the present contemplation of the parties hereto.
Notwithstanding the foregoing, if the Pledgor in good faith
contests a Requirement, it
6
shall not be obligated to comply with such Requirement to the
extent such non-compliance or deferral is consistent with law and
does not have a material adverse effect on the Collateral or the
security interest therein.
(iii) Notice of Laws. The Pledgor agrees to give the Collateral
Trustee notice of any material violations of any Requirement
enacted, passed, promulgated, made, issued or adopted by any of the
governmental departments or agencies or authorities hereinbefore
mentioned with respect to the Collateral or the Pledgor’s use
thereof, a copy of which is served upon or received by the Pledgor,
or otherwise brought to the attention of a responsible officer of
the Pledgor, by mailing within fifteen (15) Business Days after
such service, receipt, or after the same otherwise comes to the
attention of the Pledgor, a copy of each and every one thereof to
the Collateral Trustee. At the same time, the Pledgor will inform
the Collateral Trustee as to the work or steps which the Pledgor
proposes to do or take in order to correct any such material
violation. Notwithstanding the foregoing, however, if such work or
step would require any alterations which would, in the Pledgor’s
reasonable opinion, reduce the value of the Collateral or change
the general character or use of the Collateral, the Pledgor may
defer compliance therewith, as long as such deferral is consistent
with applicable law in order that the Pledgor may, at the Pledgor’s
expense, contest or seek modification of or other relief with
respect to such Requirements, but nothing herein shall relieve the
Pledgor of the duty and obligation, at the Pledgor’s expense, to
comply with such Requirements, or such Requirements as modified,
whenever the Collateral Trustee shall so direct.
Section 7. Collateral Trustee Appointed Attorney-in-Fact. The
Pledgor hereby appoints the Collateral Trustee as the Pledgor’s
attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Collateral Trustee’s discretion, upon the occurrence
and during the continuation of an Event of Default, to take any
action and to execute any instrument which the Collateral Trustee
may reasonably deem necessary or advisable to accomplish the
purposes of this Agreement, which appointment as attorney-in-fact
is coupled with an interest.
Section 8. Collateral Trustee May Perform. If the Pledgor fails to
perform any agreement contained herein within a reasonable time
after receipt of a written request to do so from the Collateral
Trustee, upon 2 Business Days prior written notice the Collateral
Trustee may itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Collateral Trustee,
including, without limitation, the reasonable fees and
out-of-pocket expenses of its counsel, incurred in connection
therewith, shall be payable by the Pledgor in accordance with
Section 7.10 of the Collateral Trust Agreement and shall be
considered Obligations.
Section 9. The Collateral Trustee. It is expressly understood and
agreed by the parties hereto, and each Priority Lien Secured Party,
by accepting the benefits of this Agreement, acknowledges and
agrees, that the obligations of the Collateral Trustee as holder of
the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only
those expressly set forth in this Agreement. The Collateral Trustee
shall act hereunder on the terms and conditions set forth in the
Collateral Trust
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Agreement. In the event of any express conflict between the terms
of this Agreement and the terms of the Collateral Trust Agreement,
the Collateral Trust Agreement shall control and govern, provided
that this provision shall not be interpreted in any way to affect
any rights expressly provided to the Priority Lien Secured Parties
under this Agreement unless such rights are expressly prohibited or
restricted under the Collateral Trust Agreement.
Section 10. Events of Default, Remedies:
A. Remedies: Obtaining the Collateral Upon Event of Default. If any
Event of Default shall have occurred and be continuing, then and in
every such case, the Collateral Trustee may, at any time or from
time to time during the continuance of such Event of Default:
(i) Declare the entire right, title and interest of the Pledgor in
and to the Collateral vested, subject to any binding and
enforceable mandatory requirements imposed by applicable law and
the DOT (and, in the case of Japan Gate Leaseholds, the
requirements imposed by the applicable Governmental Authorities
and/or Airport Authorities), in which event such rights, title and
interest shall immediately vest in the Collateral Trustee, in which
case the Pledgor agrees to execute and deliver such deeds of
conveyance, assignments and other documents or instruments
(including any notices or applications to the DOT, FAA, applicable
Japan Route Foreign Aviation Authorities, Governmental Authorities
or Airport Authorities having jurisdiction over any such Japan
Route or the use thereof) as shall be requested by the Collateral
Trustee in order to effectuate the transfer of such Collateral,
together with copies of the certificates or orders issued by the
DOT and the Japan Route Foreign Aviation Authorities representing
same and any other rights of the Pledgor with respect thereto, to
any designee or designees selected by the Collateral Trustee and
approved by the DOT and, to the extent necessary, by any Japan
Route Foreign Aviation Authorities; it being understood that the
Pledgor’s obligation to deliver such Collateral and such documents
and instruments with respect thereto is of the essence of this
Agreement and that, accordingly, upon application to a court of
equity having jurisdiction, the Collateral Trustee shall be
entitled to a decree requiring specific performance by the Pledgor
of said obligations; and
(ii) Sell or otherwise liquidate, or direct the Pledgor to sell or
otherwise liquidate, any or all of the Collateral or any part
thereof and take possession of the proceeds of any such sale or
liquidation, in each case subject to any binding and enforceable
mandatory requirements imposed by applicable law and Airport
Authorities with respect to Japan Gate Leaseholds.
B. Remedies; Disposition of the Collateral.
(i) If any Event of Default shall have occurred and be continuing,
the Collateral Trustee may from time to time exercise in respect of
the Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, and to the extent not in
violation of applicable law, including Title 49, and subject to the
approval of the DOT or its successor or nominee, all the rights and
remedies of a secured party on
8
default under the UCC in effect in all relevant jurisdictions at
the time of such Event of Default, and the Collateral Trustee may
also in its sole discretion, without notice except as specified
below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker’s board
or at any of the Collateral Trustee’s offices or elsewhere, for
cash, on credit or for future delivery, and at such price or prices
and upon such other terms as the Collateral Trustee may deem
commercially reasonable. To the extent not inconsistent with Title
49 and the DOT or FAA requirements and any additional requirements
of the applicable Governmental Authorities and/or Airport
Authorities, the Collateral Trustee or any other Priority Lien
Secured Party may be the purchasers of any or all of the Collateral
at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or
any portion of the Collateral sold at such sale, to use and apply
any of the Priority Lien Obligations owed to such Person as a
credit on account of the purchase price of any Collateral payable
by such Person at such sale. Each purchaser at any such sale shall
acquire the property sold absolutely free from any claim or right
on the part of the Pledgor, and the Pledgor hereby waives, to the
fullest extent permitted by law, all rights of redemption, stay or
appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted.
The Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days’ notice to the Pledgor of the
time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable
notification. The Collateral Trustee shall not be obligated to make
any sale of Collateral regardless of notice of sale having been
given. The Collateral Trustee may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. The Pledgor hereby
waives, to the full extent permitted by law, any claims against the
Collateral Trustee arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public
sale.
(ii) Except as otherwise provided herein, the Pledgor hereby
waives, to the fullest extent permitted by applicable law, notice
or judicial hearing in connection with the Collateral Trustee’s
taking possession or the Collateral Trustee’s disposition of any of
the Collateral, including, without limitation, any and all prior
notice and hearing for any prejudgment remedy or remedies and any
such right which the Pledgor would otherwise have under law; and
the Pledgor hereby further waives to the fullest extent permitted
by applicable law: (a) all damages occasioned by such taking of
possession; (b) all other requirements as to the time, place and
terms of sale or other requirements with respect to the enforcement
of the Collateral Trustee’s rights hereunder; and (c) all rights of
redemption, appraisement, valuation, stay, extension or moratorium
now or hereafter in force under any applicable law. Any sale of, or
the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest,
claim and demand, either at law or in equity, of the Pledgor
therein and thereto, and shall be a perpetual bar both at law and
in equity against the Pledgor and against any and all Persons
claiming or attempting to claim the Collateral so sold, optioned or
realized upon, or any part thereof, from, through and under the
Pledgor.
9
(iii) If any Event of Default shall have occurred and be
continuing, then the Collateral Trustee may use the blank, undated,
signed Japan Route FAA Slot transfer documents held by it from time
to time (substantially in the form of Exhibit A hereto) as a means
to effectuate a transfer as contemplated herein, subject in each
case to applicable law.
(iv) In connection with any foreclosure, collection, sale or other
enforcement of Liens granted to the Collateral Trustee in this
Agreement, the Pledgor will cooperate in good faith with the
Collateral Trustee or its designee in obtaining all regulatory
licenses, consents and other governmental approvals necessary or
(in the opinion of the Collateral Trustee or its designee)
desirable to conduct all aviation operations with respect to the
Collateral and will, at the request of the Collateral Trustee and
in good faith, continue to operate and manage the Collateral and
maintain all applicable regulatory licenses with respect to the
Collateral until such time as the Collateral Trustee or its
designee obtain such licenses, consents and approvals, and at such
time the Pledgor will cooperate in good faith with the transition
of the aviation operations with respect to the Collateral to any
new aviation operator (including, without limitation, the
Collateral Trustee or its designee).
Section 11. Application of Proceeds.
(a) Any cash held by the Collateral Trustee as Collateral and all
cash proceeds received by the Collateral Trustee in respect of any
sale of, collection from, or other realization upon all or any part
of the Collateral pursuant to the exercise by the Collateral
Trustee of its remedies as a secured creditor as provided in
Section 10 of this Agreement shall be applied from time to time by
the Collateral Trustee in accordance with the terms of the
Collateral Trust Agreement.
(b) It is understood that the Pledgor shall remain liable to the
extent of any deficiency between the amount of the proceeds of the
Collateral and the aggregate amount of the outstanding Priority
Lien Obligations.
Section 12. No Waiver; Discontinuance of Proceeding.
(a) Each and every right, power and remedy hereby specifically
given to the Collateral Trustee or otherwise in this Agreement
shall be cumulative and shall be in addition to every other right,
power and remedy specifically given under this Agreement or the
other Priority Lien Documents now or hereafter existing at law, in
equity or by statute and each and every right, power and remedy
whether specifically herein given or otherwise existing may be
exercised from time to time or simultaneously and as often and in
such order as may be deemed expedient by the Collateral Trustee.
All such rights, powers and remedies shall be cumulative and the
exercise or the beginning of the exercise of one shall not be
deemed a waiver of the right
10
to exercise any other or others. No delay or omission of the
Collateral Trustee in the exercise of any such right, power or
remedy and no renewal or extension of any of the Priority Lien
Obligations shall impair any such right, power or remedy or shall
be construed to be a waiver of any default or Event of Default or
an acquiescence therein. No notice to or demand on the Pledgor in
any case shall entitle it to any other or further notice or demand
in similar or other circumstances or constitute a waiver of any of
the rights of the Collateral Trustee to any other or further action
in any circumstances without notice or demand. In the event that
the Collateral Trustee shall bring any suit to enforce any of its
rights hereunder and shall be entitled to judgment, then in such
suit the Collateral Trustee may recover reasonable out-of-pocket
expenses, including reasonable attorneys’ fees, and the amounts
thereof shall be included in such judgment.
(b) In the event the Collateral Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason
or shall have been determined adversely to the Collateral Trustee,
then and in every such case the Pledgor, the Collateral Trustee and
each holder of any of the Priority Lien Obligations shall to the
extent permitted by applicable law be restored to their respective
former positions and rights hereunder with respect to the
Collateral, and all rights, remedies and powers of the Collateral
Trustee and the Priority Lien Secured Parties shall continue as if
no such proceeding had been instituted.
Section 13. [Reserved].
Section 14. Amendments, etc. This Agreement may not be amended,
modified or waived except with the written consent of the Pledgor
and the Collateral Trustee (acting pursuant to and in accordance
with the terms of the Collateral Trust Agreement). Any amendment,
modification or supplement of or to any provision of this
Agreement, any termination or waiver of any provision of this
Agreement and any consent to any departure by the Pledgor from the
terms of any provision of this Agreement shall be effective only in
the specific instance and for the specific purpose for which made
or given. No notice to or demand upon the Pledgor in any instance
hereunder shall entitle the Pledgor to any other or further notice
or demand in similar or other circumstances.
Section 15. Termination; Release.
(a) Upon the Discharge of Priority Lien Obligations, this Agreement
shall automatically terminate (provided that all indemnities set
forth in the Collateral Trust Agreement shall survive) and the
Collateral Trustee, at the request and expense of the Pledgor, will
promptly execute and deliver to the Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this
Agreement, and, subject to the terms of the Collateral Trust
Agreement, will duly assign, transfer and deliver to the Pledgor
(without recourse and without any representation or warranty) such
of its Collateral as may be in the possession of the Collateral
Trustee and as has not theretofore been sold or otherwise applied
or released pursuant to this Agreement. As used in this Agreement,
“Termination Date” shall mean the date upon which the Discharge of
Priority Lien Obligations shall have occurred.
11
(b) The Liens on the Collateral created by this Agreement shall be
released in accordance with and to the extent contemplated by the
terms of the Collateral Trust Agreement.
(c) At any time that the Pledgor desires that Collateral be
released as provided in the foregoing Section 15(a) or (b), it
shall deliver to the Collateral Trustee a certificate signed by its
chief financial officer or another authorized senior officer
stating that the release of the respective Collateral is permitted
pursuant to Section 15(a) or (b). The Collateral Trustee shall have
no liability whatsoever to any Priority Lien Secured Party as the
result of any release of Collateral by it as permitted by this
Section 15.
Section 16. Definitions. The following terms shall have the
following meanings. Such definitions shall be equally applicable to
the singular and plural forms of the terms defined.
“Agreement” has the meaning provided in the preamble hereto.
“Airport Authority” shall mean any city or any public or private
board or other body or organization chartered or otherwise
established for the purpose of administering, operating or managing
airports or related facilities.
“Collateral” has the meaning provided in Section 1 hereof.
“DOT” shall mean the United States Department of Transportation and
any successor thereto.
“Event of Default” shall mean any event that has occurred that
constitutes a default or an event of default under any Priority
Lien Document entitling the Collateral Trustee to foreclose upon,
collect or otherwise enforce any of the Liens under this
Agreement.
“FAA” shall mean the Federal Aviation Administration of the United
States of America and any successor thereto.
“FAA Slot” shall mean, in the case of airports in the United
States, at any time, the right and operational authority to conduct
one Instrument Flight Rule (as defined in Title 14) scheduled
landing or take-off operation at a specific time or during a
specific time period at any airport at which landings or take-offs
are restricted, including, without limitation, slots, arrival and
operating authorizations, whether pursuant to FAA or DOT
regulations or orders pursuant to Title 14, Title 49 or other
federal statutes now or hereinafter in effect.
“Fifth-Freedom Rights” shall mean the operational right to enplane
passenger traffic and cargo in a foreign country and deplane it in
another foreign country, including any such right pursuant to a
bilateral treaty between the United States and a foreign
country.
“Foreign Slot” shall mean, in the case of airports outside the
United States, at any time, the right and operational authority to
conduct one landing or take-off at a specific time or during a
specific time period.
12
“Governmental Authority” shall mean the government of the United
States of America, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank organization,
or other entity exercising executive, legislative, judicial, taxing
or regulatory powers or functions of or pertaining to government.
Governmental Authority shall not include any Person in its capacity
as an Airport Authority.
“Indenture” has the meaning provided in the recitals hereof.
“Japan Gate Leaseholds” shall mean, at any time, all of the right,
title, privilege, interest and authority, now held or hereafter
acquired by the Pledgor in connection with the right to use,
operate or occupy space in an airport terminal at an airport where
the Pledgor conducts scheduled nonstop service utilizing the Japan
Routes to the extent such right, title, privilege, interest or
authority is actually used in conjunction with such nonstop service
(other than (i) at airports in China, including Hong Kong, or (ii)
at LaGuardia Airport, Reagan National Airport or London Heathrow
Airport, in any case of this clause (ii) to the extent otherwise
pledged by the Pledgor to other Persons).
“Japan Route FAA Slot” shall mean, at any time, any FAA Slot of the
Pledgor, now held or hereafter acquired, at an airport in the
United States that serves as an origin or destination point for
nonstop flights that the Pledgor operates from time to time
utilizing the Japan Routes (other than at LaGuardia Airport or
Reagan National Airport, in each case to the extent otherwise
pledged by the Pledgor to other Persons) to the extent such FAA
Slot is actually used in conjunction with the operation of such
nonstop service.
“Japan Route Foreign Aviation Authority” shall mean any foreign
governmental, quasi-governmental, regulatory or other agency,
public corporation or private entity that exercises jurisdiction
over the issuance or authorization (a) to serve any foreign point
on the Japan Routes that the Pledgor is serving at any time (other
than points in China, including Hong Kong) and/or to conduct
operations related to the Japan Routes and Japan Gate Leaseholds
(other than gate leaseholds at airports in China, including Hong
Kong) and/or (b) to hold and operate any Japan Route Foreign Slots
(other than Slots at airports in China, including Hong Kong).
“Japan Route Foreign Slot” shall mean, at any time, any Foreign
Slot of the Pledgor, now held or hereafter acquired, at an airport
outside the United States that serves as an origin or destination
point for nonstop flights that the Pledgor operates from time to
time utilizing the Japan Routes (other than (i) at airports in
China, including Hong Kong, or (ii) at London Heathrow Airport to
the extent otherwise pledged by the Pledgor to other Persons) to
the extent such Foreign Slot is actually used in conjunction with
the operation of such nonstop service.
“Japan Routes” shall mean the authority the Pledgor now holds, or
hereafter acquires from the DOT pursuant to Title 49 or other
applicable law, to operate scheduled foreign air transportation of
persons, property and mail between a point or points in the United
States
13
and a point or points in Japan, and beyond between a point or
points in Japan and a point or points in other countries, including
the authority set forth on Schedule I hereto, including applicable
designations (including the Pledgor’s designation as a “U.S.
incumbent combination carrier” under Part I, Section A of the
Memorandum of Understanding concluded in 1998 between Japan and the
United States amending the Air Services Agreement of 1952 between
Japan and the United States), frequencies, exemptions,
certificates, Fifth-Freedom Rights and “behind and beyond rights,”
in each case whether or not utilized by the Pledgor; except to the
extent such authority relates to all-cargo service.
“Japan Slot” shall mean a Japan Route FAA Slot and a Japan Route
Foreign Slot, or either of them.
“Material Adverse Effect” means a material adverse effect on (1)
the Collateral, taken as a whole, or (2) the Japan Routes.
“Permitted Liens” means those Liens on Collateral which, under each
of the Priority Lien Documents, are permitted to be incurred on a
priority basis to the Liens granted hereunder.
“Pledgor” has the meaning provided in the preamble hereto.
“Proceeds” shall have the meaning assigned to that term under the
UCC as in effect in any relevant jurisdiction or under other
relevant law and, in any event, shall include, but not be limited
to, any and all (i) proceeds of any insurance, indemnity, warranty
or guarantee payable to the Collateral Trustee or to the Pledgor or
any Affiliate of the Pledgor from time to time with respect to any
of the Collateral, (ii) payments (in any form whatsoever), made or
due and payable to the Pledgor from time to time in connection with
any requisition, confiscation, condemnation, seizure or forfeiture
of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of Governmental Authority), (iii)
instruments representing obligations to pay amounts in respect of
the Collateral, and (iv) other amounts from time to time paid or
payable under or in connection with any of the Collateral.
“Priority Lien Secured Parties” shall mean the holders of Priority
Lien Obligations and the Priority Lien Representatives.
“Requirements” has the meaning provided in Section 6(ii)
hereof.
“Termination Date” shall mean the date upon which the Discharge of
Priority Lien Obligations shall have occurred.
“Title 14” shall mean Title 14 of the United States Code of Federal
Regulations, including Part 93, Subparts K and S thereof, as
amended from time to time or any successor or recodified
regulation.
14
“Title 49” shall mean Title 49 of the United States Code, which,
among other things, recodified and replaced the U.S. Federal
Aviation Act of 1958, and the rules and regulations promulgated
pursuant thereto or any subsequent legislation that amends,
supplements or supersedes such provisions.
“United States Citizen” has the meaning provided in Section 4(vii)
hereof.
Section 17. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the
respective parties hereto shall be in writing (including
telegraphic, telex, facsimile transmission, electronic mail or
cable communication) and shall be delivered, mailed, telegraphed,
telexed, facsimile transmitted or cabled, addressed:
(a) if to the Pledgor:
United Air Lines, Inc. 77 W. Wacker Drive Chicago, IL 60601
Telephone: (312) 997-8000 Facsimile: (312) 997-8180 Attention:
General Counsel
With a copy to:
Kirkland & Ellis LLP 300 North LaSalle Street Chicago, Illinois
60654 Facsimile: 312-862-2200 Attention: Linda K. Myers, P.C.,
Esq.
(b) if to the Collateral Trustee, to its office at:
Wilmington Trust FSB, as Collateral Trustee Suite 1290 50 South
Sixth Street Minneapolis, MN 55402 Attn: Corporate Client Services
Facsimile: 612-217-5651
With a copy to:
Morris James LLP 500 Delaware Avenue, Suite 1500 Wilmington,
Delaware 19801-1494 Attention: Lewis C. Ledyard, III
15
or at such other address as shall have been furnished in writing by
any Person described above to the party required to give notice
hereunder. All such notices and communications shall, when mailed,
telegraphed, telexed, facsimile transmitted, e-mailed or cabled or
sent by overnight courier, be effective on the third Business Day
following deposit in the U.S. mails, certified, return receipt
requested, when delivered to the telegraph company, cable company
or on the day following delivery to an overnight courier, as the
case may be, or sent by telex or facsimile device, except that
notices and communications to the Collateral Trustee shall not be
effective until received by the Collateral Trustee.
Section 18. Continuing Security Interest; Transfer of Notes. This
Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the
Discharge of Priority Lien Obligations, (ii) be binding upon the
Pledgor, its successors and assigns, and (iii) inure, together with
the rights and remedies of the Collateral Trustee hereunder, to the
benefit of the Collateral Trustee and each other Priority Lien
Secured Party and each of their respective successors, permitted
transferees and permitted assigns; no other persons (including,
without limitation, any other creditor of the Pledgor) shall have
any interest herein or any right or benefit with respect hereto.
Without limiting the generality of the foregoing clause (iii) and
subject to the provisions of the applicable Priority Lien
Documents, any Priority Lien Secured Party may assign or otherwise
transfer any indebtedness held by it secured by this Agreement to
any other person or entity, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof
granted to such Priority Lien Secured Party herein or otherwise,
subject, however, to the provisions of the applicable Priority Lien
Documents.
Section 19. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF
THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW
OF THE STATE OF NEW YORK.
Section 20. Consent to Jurisdiction and Service of Process. All
judicial proceedings brought against either party to this Agreement
with respect to this Agreement may be brought in any state or
federal court of competent jurisdiction in the State of New York
and by execution and delivery of this Agreement, each party to this
Agreement accepts for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction and
venue of the aforesaid courts, and irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Agreement.
Service of all process in any such proceedings in any such court
may be delivered by registered mail to the Pledgor at the address
set forth in Section 17 of this Agreement and such service being
hereby acknowledged by the Pledgor to be effective and binding
service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit
the right of one party to this Agreement to bring proceedings
against the other party in the courts of any other
jurisdiction.
Section 21. Security Interest Absolute. The obligations of the
Pledgor hereunder shall remain in full force and effect without
regard to, and shall not be impaired by (a) any
16
bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of the Pledgor, except to the
extent that the enforceability thereof may be limited by any such
event; (b) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect of this
Agreement or any other Priority Lien Documents, except as
specifically set forth in a waiver granted pursuant to Section 14;
(c) any amendment to or modification of any Priority Lien Document
or any security for any of the Priority Lien Obligations, whether
or not the Pledgor shall have notice or knowledge of any of the
foregoing, except as specifically set forth in an amendment or
modification executed pursuant to Section 14; (d) any lack of
validity or enforceability of the Priority Lien; or (e) any other
circumstances which might otherwise constitute a defense available
to, or a discharge of, the Pledgor (other than payment or
performance in accordance with the terms of the Priority Lien
Documents).
Section 22. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 23. Headings. Section headings used in this Agreement are
for convenience of reference only and shall not affect the
construction of this Agreement.
Section 24. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute one
and the same Agreement. A set of the counterparts executed by all
the parties hereto shall be lodged with the Pledgor and the
Collateral Trustee. Delivery of an executed counterpart of a
signature page of this Agreement by facsimile or electronic .pdf
copy shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 25. Successors and Assigns. This Agreement shall be binding
upon the Pledgor and its successors and assigns and shall inure to
the benefit of the Collateral Trustee and each Priority Lien
Secured Party and their respective successors and permitted
assigns; provided that the Pledgor may not transfer or assign any
or all of its rights or obligations hereunder without the prior
written consent of the Collateral Trustee, unless otherwise
permitted by the applicable Priority Lien Documents. All
agreements, statements, representations and warranties made by the
Pledgor herein or in any certificate or other instrument delivered
by the Pledgor or on its behalf under this Agreement shall be
considered to have been relied upon by the Priority Lien Secured
Parties and shall survive the execution and delivery of this
Agreement and the other Priority Lien Documents regardless of any
investigation made by the Priority Lien Secured Parties or on their
behalf.
Section 26. Limited Obligations. It is the desire and intent of the
Pledgor, the Collateral Trustee and the Priority Lien Secured
Parties that this Agreement shall be enforced against the Pledgor
to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is
sought. If and to the extent that the obligations of the Pledgor
under this Agreement shall be adjudicated to be invalid or
unenforceable for any reason
17
(including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers, which
laws would determine the solvency of the Pledgor by reference to
the full amount of the Priority Lien Obligations at the time of the
execution and delivery of this Agreement), then the amount of the
Priority Lien Obligations of the Pledgor shall be deemed to be
reduced and the Pledgor shall pay the maximum amount of the
Priority Lien Obligations which would be permissible under the
applicable law.
Section 27. Construction of Schedule I. It is understood and agreed
that the last two columns of Schedule I are intended to be
descriptive of the Japan Routes listed on such Schedule as of the
date hereof and shall not be construed as limiting in any way the
Collateral subject to this Agreement.
Section 28. Rules of Interpretation. The parties to this Agreement
agree that the Rules of Interpretation set out in Section 1.2 of
the Collateral Trust Agreement shall apply to this Agreement
mutatis mutandis as if set out in this Agreement.
[Remainder of Page Intentionally Left Blank]
18
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
UNITED AIR LINES, INC.
By: /s/ Stephen Lieberman Name: Stephen Lieberman Title: Vice
President and Treasurer
19
By: /s/ Peter Finkel Name: Peter Finkel Title: Vice President
20
Exhibit A
Office of Slot Administration Office of Chief Counsel - Slot
Transfers Federal Aviation Administration 800 Independence Avenue,
S.W. Washington, D.C. 20591
Re: Request for Confirmation of Slot Transfers
Dear Sirs/Madams:
Please be advised that, pursuant to 14 C.F.R. § 93.221(a), United
Air Lines, Inc. (“United”) intends to transfer all rights,
interests, and privileges pertaining to the slots listed on the
attached Schedule A (attached hereto) to [NAME A]. The slots
involved in the transaction are not used for international or
essential air service, nor are they AIR-21 slot exemptions. This
slot transfer is permanent.
This letter serves as written evidence of United’s and [NAME A]’s
consent to the transfer of the above-referenced slots — said
transfer to be effective as of the date upon which [NAME A] signs
this letter, subject to confirmation by the FAA. Upon confirmation
by the FAA, [NAME A] will become the holder of record of the
above-described slots.
Please confirm the transfer of the above-described slots by
stamping and signing the acknowledgement copy of this letter and
returning it to [Name, Title,] by facsimile at and by mail at
.
Sincerely, [NAME] [Date] [TITLE] United Air Lines, Inc. CONFIRMED
BY: [FAA Name, Date]
[NAME] [Date] [TITLE] [NAME A]
CONFIRMED BY: [FAA Name, Date]
Sch. I-1
Exhibit 4.2
Table of Contents Page
Section 1. Pledge 2
Section 2. Obligations 3
Section 4. Representations, Warranties and Covenants 3
Section 5. Supplements, Further Assurances 6
Section 6. Provisions Concerning Pledged Collateral 6
Section 7. Collateral Trustee Appointed Attorney-in-Fact 8
Section 8. Collateral Trustee May Perform 8
Section 9. The Collateral Trustee 8
Section 10. Events of Default, Remedies 8
Section 11. Application of Proceeds 11
Section 12. No Waiver; Discontinuance of Proceeding 11
Section 13. [Reserved] 11
Section 16. Definitions 12
Section 17. Notices 16
Section 19. Governing Law 17
Section 20. Consent to Jurisdiction and Service of Process 17
Section 21. Security Interest Absolute 17
Section 22. Severability of Provisions 18
i
Section 26. Limited Obligations 18
Section 27. Construction of Schedule I 19
Section 28. Rules of Interpretation 19
EXHIBIT A – Form of Japan Slot Transfer Form
Schedule I – Japan Routes
ii
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND
SECURITY INTEREST GRANTED TO THE COLLATERAL TRUSTEE PURSUANT TO
THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY SUCH
COLLATERAL TRUSTEE HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE
COLLATERAL TRUST AGREEMENT, DATED AS OF JANUARY 15, 2010, AMONG
UNITED AIR LINES, INC., THE BANK OF NEW YORK MELLON TRUST COMPANY,
N.A., AS TRUSTEE UNDER THE INDENTURE (AS DEFINED THEREIN) AND
WILMINGTON TRUST FSB, AS COLLATERAL TRUSTEE (AS AMENDED,
SUPPLEMENTED, AMENDED AND RESTATED OR OTHERWISE MODIFIED AND IN
EFFECT FROM TIME TO TIME, THE “COLLATERAL TRUST AGREEMENT”). IN THE
EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE COLLATERAL TRUST
AGREEMENT AND THIS AGREEMENT, THE TERMS OF THE COLLATERAL TRUST
AGREEMENT WILL GOVERN.
JUNIOR LIEN SECURITY AGREEMENT
JUNIOR LIEN SECURITY AGREEMENT, dated as of April 19, 2010 (as
amended, modified or supplemented from time to time, the
“Agreement”), between UNITED AIR LINES, INC., a Delaware
corporation (“United”) (together with its permitted successors and
assigns, the “Pledgor”) and WILMINGTON TRUST FSB, as Collateral
Trustee (together with its successors and permitted assigns, the
“Collateral Trustee”), for the benefit of the Junior Lien Secured
Parties. Except as otherwise defined herein, terms used herein and
defined in the Collateral Trust Agreement shall be used herein as
therein defined.
W I T N E S S E T H:
WHEREAS, the Pledgor and the Collateral Trustee are parties to (i)
that certain Junior Lien Indenture dated as of January 15, 2010 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Indenture”), by and among United, the Guarantors party
thereto, the Collateral Trustee and The Bank of New York Mellon
Trust Company, N.A., as trustee (together with its successors and
permitted assigns, the “Indenture Trustee”), and (ii) that certain
Collateral Trust Agreement dated as of January 15, 2010 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Collateral Trust Agreement”), by and among United, the
Indenture Trustee and the Collateral Trustee;
WHEREAS, in order to secure the Pledgor’s obligations under the
Indenture and to induce the Escrow Agent to release the proceeds
from the Escrow Account to the Pledgor in accordance with the terms
of the Escrow and Security Agreement, the Pledgor has agreed to
grant a continuing Lien on the Collateral (as defined below) to
secure the Junior Lien Obligations;
WHEREAS, the Pledgor may, from time to time, incur additional
Junior Lien Obligations in accordance with the terms of the
Collateral Trust Agreement and, in order to
induce the applicable Junior Lien Representatives and holders of
additional Junior Lien Obligations to enter into the applicable
Junior Lien Documents and to make the applicable Junior Lien Debt
available to the Pledgor as provided therein, the Pledgor agrees to
grant to the Collateral Trustee a continuing Lien on the Collateral
(as defined below) to secure such additional Junior Lien
Obligations;
WHEREAS, concurrently herewith, the Pledgor and the Collateral
Trustee are entering into (i) that certain Indenture dated as of
the date hereof (as amended, restated, supplemented or otherwise
modified from time to time), by and among United, the Guarantors
party thereto, and The Bank of New York Mellon Trust Company, N.A.,
as trustee, and (iii) that certain Priority Lien Security Agreement
dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time), by and among the Pledgor and
the Collateral Trustee.
WHEREAS, the Pledgor desires to execute this Agreement to satisfy
the condition described in the preceding paragraphs; and
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor hereby makes the following
representations and warranties to the Collateral Trustee and hereby
covenants and agrees with the Collateral Trustee as follows:
Section 1. Pledge. The Pledgor hereby pledges to the Collateral
Trustee and grants to the Collateral Trustee for the benefit of the
Junior Lien Secured Parties a security interest in all of the
following (the “Collateral”), to secure all of the Junior Lien
Obligations:
(i) all of the right, title and interest of the Pledgor in, to and
under the Japan Routes, the Japan Slots, and the Japan Gate
Leaseholds from time to time; and
(ii) all of the right, title and interest of the Pledgor in, to and
under all Proceeds of any and all of the foregoing (including,
without limitation, all Proceeds (of any kind) received or to be
received by the Pledgor upon the transfer or other such disposition
of such Collateral notwithstanding whether the pledge and grant of
the security interest in such Collateral is legally effective under
applicable law);
provided, however, that notwithstanding any other provision of this
Agreement, this Agreement shall not constitute a grant of a
security interest in any Japan Gate Leaseholds (and no such
property shall be “Collateral” for purposes of this Agreement) to
the extent that such grant of a security interest is prohibited by
any applicable law or a Governmental Authority or Airport
Authority, requires a consent not obtained of any Governmental
Authority or Airport Authority, or is prohibited by, or constitutes
a breach or default under or results in the termination of or
requires any consent not obtained under, any contract, license,
agreement, instrument or other document evidencing or giving rise
to the Pledgor’s interest in such Japan Gate Leaseholds, except to
the extent that such applicable law, requirement or prohibition by
any Governmental Authority or Airport Authority, or the term in
such contract, license, agreement, instrument or
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other document or shareholder or similar agreement providing for
such prohibition, breach, default or termination or requiring such
consent is ineffective under applicable law, including without
limitation, the UCC; and provided further, that notwithstanding any
other provision of this Agreement, this Agreement shall not
constitute a grant of a security interest in any Japan Route
Foreign Slots to the extent the grant of such security interest is
prohibited by applicable foreign law.
Section 2. Obligations. This Agreement secures, and the Collateral
is collateral security for, the Junior Lien Obligations.
Section 3. No Release. Nothing set forth in this Agreement shall
relieve the Pledgor from the performance of any term, covenant,
condition or agreement on the Pledgor’s part to be performed or
observed under or in respect of any of the Collateral or from any
liability to any Person under or in respect of any of the
Collateral or impose any obligation on the Collateral Trustee or
any Junior Lien Secured Party to perform or observe any such term,
covenant, condition or agreement on the Pledgor’s part to be so
performed or observed or impose any liability on the Collateral
Trustee or any Junior Lien Secured Party for any act or omission on
the part of the Pledgor relating thereto or for any breach of any
representation or warranty on the part of the Pledgor contained in
this Agreement, or in respect of the Collateral or made in
connection herewith or therewith. This Section 3 shall survive the
termination of this Agreement and the discharge of the Pledgor’s
other obligations hereunder and under the Junior Lien
Documents.
Section 4. Representations, Warranties and Covenants. The Pledgor
represents, warrants and covenants as follows:
(i) All filings, registrations and recordings necessary or
reasonably requested by the Collateral Trustee or any Junior Lien
Representative to create, preserve, protect and perfect the
security interests granted by the Pledgor to the Collateral Trustee
for the benefit of the Junior Lien Secured Parties in respect of
the Collateral have been accomplished by the Pledgor to the extent
that such security interests can be perfected under the UCC and
Title 49. The security interests granted to the Collateral Trustee
for the benefit of the Junior Lien Secured Parties pursuant to this
Agreement in and to the Collateral constitute and hereafter at all
times shall constitute a perfected security interest therein
superior and prior to the rights of all other Persons therein,
subject, in the case of priority only, only to Permitted Liens, to
the extent such perfection and priority can be obtained under the
UCC or by filing a record of such security interest with the FAA,
and the Collateral Trustee is entitled to all the rights,
priorities and benefits afforded by the UCC as enacted in any
relevant jurisdiction and Title 49 to perfected security
interests.
(ii) There are no filings, registrations or recordings necessary to
create, preserve, protect or perfect the security interests granted
by the Pledgor to the Collateral Trustee for the benefit of the
Junior Lien Secured Parties in respect of the Collateral under
Title 49.
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(iii) The Pledgor is, and as to Collateral acquired by it from time
to time after the date hereof the Pledgor will be, the holder of
all such Collateral free from any Lien or adverse claims except for
(1) the Lien and security interest created by this Agreement and
(2) Permitted Liens. The Pledgor shall use commercially reasonable
efforts to defend the Collateral against any and all claims and
demands of all Persons at any time claiming any interest therein
adverse to the Collateral Trustee or any Junior Lien Secured Party
(other than Permitted Liens).
(iv) There is no financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) on
the date hereof, covering or purporting to cover any interest of
any kind in the Collateral, and so long as all of the Junior Lien
Documents have not been terminated or any of the Junior Lien
Obligations remain outstanding, the Pledgor shall not execute or
authorize to be filed in any public office any financing statement
(or similar statement or instrument of registration under the law
of any jurisdiction), or statements relating to the Collateral,
except financing statements (or similar statements or instruments
of registration under the law of any jurisdiction) filed or to be
filed in respect of and covering the security interests granted
hereby by the Pledgor and except with respect to Liens permitted by
each applicable Junior Lien Document.
(v) The chief executive offices of the Pledgor as of the date of
this Agreement are located at 77 W. Wacker, Chicago, Illinois
60601. The Pledgor shall not, until it shall have given to the
Collateral Trustee not less than 10 days’ prior written notice of
its intention to do so, (a) move its chief executive office from
the location referred to in the previous sentence or change its
jurisdiction of incorporation, or (b) change its name, identity or
corporate or other organizational structure to such an extent that
any financing statement filed by the Collateral Trustee in
connection with this Agreement would become misleading; and the
Pledgor shall, in each case, provide such other information in
connection therewith as the Collateral Trustee or any Junior Lien
Representative may reasonably request and shall have taken all
action reasonably satisfactory to the Collateral Trustee and the
Junior Lien Representatives to maintain the perfection and priority
of the security interest of the Collateral Trustee on behalf of the
Secured Parties in the Collateral intended to be granted
hereby.
(vi) Set forth on Schedule I is a true, correct and complete list
of the Japan Routes and Japan Slots at Tokyo’s Narita Airport, in
each case as of the date hereof, including a copy of each
certificate or order issued by the DOT representing such Japan
Routes. The Pledgor represents and warrants that it holds the
requisite authority to operate over the Japan Routes pursuant to
Title 49 and all rules and regulations promulgated thereunder,
subject only to the regulations of the DOT, the FAA and the
applicable Japan Route Foreign Aviation Authority, and that it has,
at all times after obtaining each such Japan Route, complied in all
material respects with all of the terms, conditions and limitations
of each such certificate or order issued by the DOT and the rules
and regulations of the applicable Japan Route Foreign Aviation
Authority and with all applicable provisions of Title 49 and
applicable rules and regulations promulgated
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thereunder, and that there exists no material violation of such
regulations, terms, conditions or limitations that gives the FAA,
DOT or the applicable Japan Route Foreign Aviation Authority the
right to terminate, cancel, withdraw or modify the rights of the
Pledgor in any such Japan Routes or Japan Slots. The Pledgor
further represents and warrants that, as of the date hereof, none
of the airports located in the United States of America at which
the Pledgor conducts scheduled operations for direct non-stop
flights to Japan using the Japan Routes is a slot-constrained
airport. If any of the airports located in the United States of
America at which the Pledgor conducts scheduled operations for
direct non-stop flights to Japan using the Japan Routes is or
becomes a slot-constrained airport after the date hereof, the
Pledgor shall promptly notify the Collateral Trustee thereof. If at
any time the Pledgor shall hold or acquire any Japan Route FAA
Slot, then the Pledgor shall promptly deliver to the Collateral
Trustee a blank, undated, signed Japan Route FAA Slot transfer
document (substantially in the form of Exhibit A hereto or such
other form reasonably satisfactory to the Collateral Trustee) with
respect to such Japan Route FAA Slot to the extent such transfer
document is applicable.
(vii) The Pledgor is an “air carrier” within the meaning of Section
40102 of Title 49 and holds a certificate under Section 41102 of
Title 49. The Pledgor holds an air carrier operating certificate
issued pursuant to Chapter 447 of Title 49. The Pledgor is a
“citizen of the United States” as defined in Section 40102(a)(15)
of Title 49 and as that statutory provision has been interpreted by
the DOT pursuant to its policies (a “United States Citizen”). The
Pledgor possesses all necessary certificates, franchises, licenses,
permits, rights, designations, authorizations, exemptions,
concessions, frequencies and consents which relate to the operation
of the routes flown by it and the conduct of its business and
operations as currently conducted except where failure to so
possess would not, in the aggregate, have a material adverse effect
on the business, operations or financial condition of United and
its subsidiaries, taken as a whole. As of the date hereof there are
no license fees owed on the Pledgor’s DOT or FAA licenses,
certificates or authorizations. The Pledgor is in compliance with
all material requirements of the certificates and authorizations
issued to it by the DOT or the FAA.
(viii) The Pledgor has full corporate power and authority and legal
right to pledge all of the Collateral pursuant to this
Agreement.
(ix) Except for matters that would not reasonably be expected to
result in a Material Adverse Effect, no consent of any other party
(including, without limitation, stockholders or creditors of the
Pledgor), and no consent, authorization, approval, or other action
by, and (except in connection with the perfection of the Lien
created hereby) no notice to or filing with, any Governmental
Authority or other Person is required either (x) for the pledge by
the Pledgor of the Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement or (y) for the
exercise by the Collateral Trustee of the rights provided for in
this Agreement or the remedies in respect of the Collateral
pursuant to this Agreement; provided, however, that the (A)
transfer of (other than the grant or pledge of a security interest
in) the Japan Routes is subject to the
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consent of the DOT pursuant to Section 41307 of Title 49 and is
subject to Presidential review pursuant to Section 41307 of Title
49, (B) any transfer of (other than the grant or pledge of a
security interest in) Japan Route FAA Slots may be subject to
confirmation by the FAA, (C) the transfer of (other than the grant
or pledge of a security interest in) Japan Gate Leaseholds may be
subject to approval by Governmental Authorities or Airport
Authorities, aviation authorities, air carriers or other lessors
and (D) the transfer of (other than the grant or pledge of a
security interest in) Japan Route Foreign Slots may be subject to
approval by the applicable Japan Route Foreign Aviation Authority
or Airport Authorities.
(x) All information set forth herein relating to the Collateral is
accurate in all material respects as of the date hereof.
(xi) This Agreement is made with full recourse to the Pledgor and
pursuant to and upon all the warranties, representations, covenants
and agreements on the part of the Pledgor contained herein.
Section 5. Supplements, Further Assurances. The Pledgor agrees that
at any time and from time to time, at the reasonable expense of the
Pledgor, the Pledgor will promptly execute, acknowledge and deliver
all further security documents, instruments, certificates, notices
and other documents, and take all further action, that may be
reasonably required under, or reasonably requested by the
Collateral Trustee or any Junior Lien Representative with respect
to, applicable law or by the DOT, Japan Route Foreign Aviation
Authorities, Governmental Authorities, Airport Authorities,
aviation authorities, air carriers or other lessors or that may be
required or that the Collateral Trustee or any Junior Lien
Representative may reasonably request in order to create, perfect,
protect, assure and enforce any security interest granted or
purported to be granted or intended to be granted hereby or to
enable the Collateral Trustee to exercise and enforce its rights
and remedies hereunder or under the Junior Lien Documents to which
it is a party with respect to any Collateral, including, without
limitation, any actions reasonably requested by the Collateral
Trustee or any Junior Lien Representative to register, record and
identify the Collateral Trustee as a “Holder” of a Japan Route FAA
Slot with the FAA and to cause evidence of its rights to be duly
recorded, filed or filed for recording, to the extent permitted or
required under any applicable law, by the Pledgor as holder, and
any actions reasonably requested by the Collateral Trustee or any
Junior Lien Representative required to perfect, preserve and
protect any such security interest under other applicable
laws.
Section 6. Provisions Concerning Pledged Collateral.
(i) Financing Statements. The Pledgor hereby authorizes the
Collateral Trustee, at any time and from time to time, to file or
record such financing statements which reasonably describe the
Collateral and amendments thereto, in the form provided to it by
the Pledgor, as may from time to time be required or necessary to
grant, continue and maintain a valid, enforceable, second priority
security interest in the Collateral as provided herein (to the
extent such perfection and priority can be obtained by filing
a
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UCC financing statement), and the other rights, as against third
parties, provided hereby, all in accordance with the UCC as enacted
in any and all relevant jurisdictions or any other relevant law.
The Pledgor shall pay any applicable filing fees and other
reasonable out-of-pocket expenses related to the filing of such
financing statements and amendments thereto. The Collateral Trustee
hereby authorizes the Pledgor to file (i) financing statements and
amendments to financing statements filed on the date hereof in each
case adding Collateral and (ii) continuation statements of any
financing statement naming the Collateral Trustee, as secured
party, and Pledgor, as debtor, in each case filed pursuant to the
terms of this Agreement and the other Junior Lien Documents.
(ii) Compliance with Laws and Regulations. Except for matters that
would not reasonably be expected to result in a Material Adverse
Effect, the Pledgor shall promptly comply in all respects with all
laws, ordinances, orders, rules, regulations, and requirements of
all federal, state, municipal or other governmental or
quasi-governmental authorities or bodies including, without
limitation, Japan Route Foreign Aviation Authorities, then having
jurisdiction over the Collateral (or any part thereof) and/or the
use thereof by the Pledgor, of every nature and kind (the
“Requirements”) including any of the same which relate to or
require changes or requirements incident to or as the result of any
use thereof or otherwise, and the Pledgor shall so comply, whether
or not such Requirements shall now exist or shall hereafter be
enacted or promulgated and whether or not the same may be said to
be within the present contemplation of the parties hereto.
Notwithstanding the foregoing, if the Pledgor in good faith
contests a Requirement, it shall not be obligated to comply with
such Requirement to the extent such non-compliance or deferral is
consistent with law and does not have a material adverse effect on
the Collateral or the security interest therein.
(iii) Notice of Laws. The Pledgor agrees to give the Collateral
Trustee notice of any material violations of any Requirement
enacted, passed, promulgated, made, issued or adopted by any of the
governmental departments or agencies or authorities hereinbefore
mentioned with respect to the Collateral or the Pledgor’s use
thereof, a copy of which is served upon or received by the Pledgor,
or otherwise brought to the attention of a responsible officer of
the Pledgor, by mailing within fifteen (15) Business Days after
such service, receipt, or after the same otherwise comes to the
attention of the Pledgor, a copy of each and every one thereof to
the Collateral Trustee. At the same time, the Pledgor will inform
the Collateral Trustee as to the work or steps which the Pledgor
proposes to do or take in order to correct any such material
violation. Notwithstanding the foregoing, however, if such work or
step would require any alterations which would, in the Pledgor’s
reasonable opinion, reduce the value of the Collateral or change
the general character or use of the Collateral, the Pledgor may
defer compliance therewith, as long as such deferral is consistent
with applicable law in order that the Pledgor may, at the Pledgor’s
expense, contest or seek modification of or other relief with
respect to such Requirements, but nothing herein shall relieve the
Pledgor of the duty and obligation, at the Pledgor’s expense, to
comply with such Requirements, or such Requirements as modified,
whenever the Collateral Trustee shall so direct.
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Section 7. Collateral Trustee Appointed Attorney-in-Fact. The
Pledgor hereby appoints the Collateral Trustee as the Pledgor’s
attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to
time in the Collateral Trustee’s discretion, upon the occurrence
and during the continuation of an Event of Default, to take any
action and to execute any instrument which the Collateral Trustee
may reasonably deem necessary or advisable to accomplish the
purposes of this Agreement, which appointment as attorney-in-fact
is coupled with an interest.
Section 8. Collateral Trustee May Perform. If the Pledgor fails to
perform any agreement contained herein within a reasonable time
after receipt of a written request to do so from the Collateral
Trustee, upon 2 Business Days prior written notice the Collateral
Trustee may itself perform, or cause performance of, such
agreement, and the reasonable expenses of the Collateral Trustee,
including, without limitation, the reasonable fees and
out-of-pocket expenses of its counsel, incurred in connection
therewith, shall be payable by the Pledgor in accordance with
Section 7.10 of the Collateral Trust Agreement and shall be
considered Obligations.
Section 9. The Collateral Trustee. It is expressly understood and
agreed by the parties hereto, and each Junior Lien Secured Party,
by accepting the benefits of this Agreement, acknowledges and
agrees, that the obligations of the Collateral Trustee as holder of
the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Agreement, are only
those expressly set forth in this Agreement. The Collateral Trustee
shall act hereunder on the terms and conditions set forth in the
Collateral Trust Agreement. In the event of any express conflict
between the terms of this Agreement and th